The Wild Wild West Era Of The Blockchain - What The Latest Ethereum Hack Tells Us About The Future Of Cryptos
A hacker drained three Etheeum wallets of more than $30 millions, in the second largest attack in the (short, but agitated) history of the Ethereum blockchain. I'm sure many of you already know that.
But what you may not know is what happened after the attack was discovered.
Well, once it was obvious that the owners lost controls of their wallets and funds, a team of white hat coders got together and continued the work of the attacker by draining the rest of the vulnerable wallets by a staggering $179 millions amount.
Yes, you read that right. A group of people decided it's better to exploit the hack until it drains completely (until there's no wallet left with that vulnerability), safeguard the funds and then redistribute them to the owners, in different, not vulnerable wallets.
So, the attack was "stopped" not because the vulnerability was fixed (there's no time to fix vulnerabilities like this when 1) you don't own the servers and 2) when the network of servers spreads across the entire world) but because a group of guardians robbed the bank faster than the attacker, secured the money and then redistributed the funds back to the owners.
Please stop for a second and contemplate this. Please. It's important.
The Digital Cowboys
I'm not going into details about the technical part, there's an excellent article on Medium by on this topic, but I will talk a little about the social implications of this situation.
We live exciting times here, in the blockchain universe. In a way, we're in full gold rush. Opportunities are popping at every step, there's a new blockchain, or ICO, or project being launched every week and, most important, there's money to be made. And when there's money, there will obviously be people who want that money to such a degree, they will be willing to break the law in order to get it.
We're in the Wild Wild West era of the blockchain. We are pioneering new territories, building the foundation of the future world. But while we're busy doing this, other are sitting on the side, waiting to reap the benefits and run.
Introducing the digital cowboys. The so called "white hat hackers" who diligently stopped all the trains, asked people to step down because they knew there will be some robbery going on down the line, and then put all the people back in other trains (if we were to re-write this event as a western movie, that's probably how it should go).
The digital cowboys silently, but very effectively, stopped a potential carnage by doing exactly what the attacker did, but with good intentions.
And that gets me to the core point of this article.
There's no difference between what the attacker did, and what the white hat group did. They both hacked wallets. The fundamental difference, though, was the intention.
The attacker's intention was greed, the white hat group's intention was compassion. They truly did it out of compassion, which, by the way, doesn't mean just caressing people on the cheeks, feeling emotional when you see poverty or donating to charity every two years. No, that's real, down to earth compassion: saving other people from harm, when you know the harm will come.
From a philosophical point of view, there's some serious food for thought here. What is actually "bad"? It's hacking people's wallets? Well, the white hat coders did just that? But then they give it back...
In every situation there's more than the eye can see. We're limited beings and, most of the time, we can correctly assess a situation only in hindsight.
And in this situation, the eye just saw a vulnerability in the Parity wallet, but the subsequent unfolding of actions created an extraordinary event, one that will for sure remain in the history of the world like the first robbery out of compassion.
Please, stop for a while and contemplate this. Please. It's important.
image source: Pixabay.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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Great post and we truly live in an exciting time for cryptos! Or society has to adapt and there are several similarities with the gold rush era!
Great post! Didn't know about the whitehackers protecting the vulnerable wallet!
Ethereum is a scam anyway. Buying ETH is basically handing over your money to Bill Gates and Goldman Sachs.
your life is a scam.
Just checked my wallets and thankfully it wasn't mine that was hacked... fewwww
Me too. I still have my remaining $179 million, blockchain be praised!
Thank you for the post.
Every profession also has to face these kinds of ethical dilemmas.
In the end we die.
This can, justifiably, motivate people to be selfish or selfless.
It is comforting to know that there is a community of strong, caring & sincere people who are very skilled, very aware and very motivated to uphold a high standard of ethical behaviour.
It humbles me, and motivates me, to stand with purpose and to be a better person!
hmm, while the notion is just, i'm just not sure if we can apply compassion when money is involved. sure they helped them not get STUNG by replacing the funds in a kinda robin hood rob back from the rich to the poor, but the poor were rich to the sum of $30 million! :) - also, 3 wallets, with $30 million in? someone needs to not be so trusting of cutting edge tech, that's just ASKING to be hacked just to see if it can be.
BUT.. . i am incredibly thankful for the new breed of compassionate white hat hackers, because without them balance and innovation would suffer at the hands of greed, when money becomes 1's and 0's like this the intention as you put it matters so much more. nice post dude, got me thinking! :)
I'm rambling here, but my wild guess is that those wallets were not belonging to individuals, but probably to some groups / businesses. With the abundance of ICOs these days, and with the need to make the contract address public in these ICOs (where else should people send their investments?) it's pretty easy to track these types of accounts. It would probably be more time consuming to track individuals accounts, although relatively easy, from a computing point of view.
So I suppose we're talking about ICO money. Again, it's just a supposition, I might be wrong.
"White hat hackers" isn't a "new breed". Hacker was originally a positive word for a computer literate person finding flaws in software, and usually exposing those flaws so that they could and would be fixed. "Cracker" is a word that has been used for malicious hackers, "black hat hacker" might be a better contemporary take on it.
If you want to read about early hacking you might want to look into phreaking and books by Cory Doctorow. There is another book I have read, but I can't remember the author...
i never said it was. read what i put. and yes i know cory, i've filmed him many times on a live stream as for background i was phone phreaking on a motorola 6800x serial port way way back. .. in analog times - the new breed was white hat hackers that had compassion.
Thanks for clearing that up, I misunderstood :-) Nice to see phone phreakers here!
My question is, what happens to those people's investments? Do they get refunded or what?
No idea.
It's actually a scary thought. Then again, that's the risk you hold when you make an investment. That's apart of the reason why you should diversify I suppose..
Has there been any comment or praise from the affected wallet owners ?
Not that I'm aware of.
Fantastic post. I didn't know about the story about the white hat hackers. This era actually reminds me of the gold rush with internet companies in the 1990s.
Security of online wallets is a major area for concern. There are so many altcoins which do not have hardware wallets, and so the only option is an online wallet.
When it comes to Steem Power, it has to be online because your voting strength depends on your online balance. If the SP power down is ever hacked, I hope these cowboys spring into action quickly.
Some way of having SP offline in a hardware wallet with an encrypted key which is used to verify your offline balance for your voting strength would be an ideal preventative measure to decentralize SP.
Well, I don't think you have to keep it online all the time. I'm sure you can use a hardware wallet for that, @furion wrote an article about that: https://steemit.com/trezor/@furion/build-yourself-a-trezor
Also @jesta has a local wallet (an app you download) called Vessel: https://github.com/aaroncox/vessel/releases
Thanks for pointing that out to me. I'll have to read those posts a few dozen times to understand them. I have access to a couple of T61 laptops, so may give it a try.
STEEM converted to STEEM POWER obviously has to be on the platform to count toward your voting strength. Being able to keep 100k SP offline and still count would be good, not that I'm anywjete near that, yet...
I'm glad that we have people like white hat hackers who have the great intention to help others instead of being greedy and taking the money for themselves despite the fact they have the knowledge to hack into these systems and extort loads of money.
Without them, even more money would've been lost and more people being left without nothing. They had so much money in their hands but chose to do the moral and ethical thing and return it after the vulnerability was patched.
We have some white knights watching over all of us and protecting us @dragosroua haha